“We have learned that economic growth and environmental protection can and should go hand in hand.”
Christopher Dodd, Former US Senator
As the economy grows, it’s inevitable that the environment may be harmed in some ways. CO2 levels rise due to large volumes of e-commernce deliveries being transported and other industrial developments, causing long-term environmental issues. Governments across the world have pledged to reduce emissions, and consumers’ awareness on the impact of their choices is also growing. All of which makes carbon-neutral shipping all the more important.
What is Carbon Neutral Shipping?
Carbon-neutral shipping encompasses various aspects, from the packaging of orders/goods to their delivery to the end customer. Numerous shipping companies often collaborate with third-party firms on carbon offset initiatives that might involve tree planting to mitigate greenhouse gas emissions. But brands must understand that customers are discerning and are becoming increasingly aware of the environmental impact of logistics. They expect brands to take effective measures to reduce emissions.
Read Also: Definitive Guide to Carbon Neutral Shipping
The Need for Carbon Neutral Shipping
The increasing demand for faster delivery places pressure on shippers and carriers to deliver promptly or risk losing their customer base. The challenge isn’t just timely delivery but achieving it sustainably.
Globally, the last mile accounts for up to 50% of total delivery carbon emissions. According to a study by Stand.earth, the last mile courier industry annually emits approximately 500,000 tonnes of CO2 in India, three million tonnes in Europe, and four million tonnes in the US.
Meanwhile, online shoppers are becoming increasingly eco-conscious, with 71% of consumers choosing products based on sustainability in the past six months. Given the environmental impact of last mile delivery, how can shippers and carriers reduce this footprint, comply with government regulations, and cater to eco-conscious customers?
Read Also: How smart technologies help meet sustainability goals
Technology a Crucial Driver
Technology has been pivotal in advancements across industries, and logistics is no exception. Emerging tech solutions hold great promise in significantly reducing emissions. Here are some key options:
A) The EV Way
Electric vehicles (EVs) are a clear solution for reducing carbon emissions in last mile logistics. However, the higher initial cost of these vehicles and a lack of charging infrastructure make the transition to EVs challenging. Although the upfront cost of an EV exceeds that of a diesel vehicle, over a span of 5-10 years, taking into account rising fuel costs and maintenance, EVs prove more economical. Transitioning to EVs, especially for heavy-duty vehicles, requires addressing challenges such as charging station availability and certain technical specifications.
Check out the TCO of EV vs Diesel Trucks
B) Routing
Brands recognize the significance of routing in emissions contributions. Legacy routing technologies have limitations, lacking advanced features like dynamic and on-demand routing. Over the last decade, technological advancements in the last mile sector have ushered in innovative solutions. Many providers, like Locus, offer sophisticated routing tools powered by machine learning.
(i) Dynamic Routing:
Rapid urbanization often leads to traffic congestion, roadblocks, and other challenges. Legacy systems, not equipped for dynamic routing, result in vehicles spending excessive time on the road, increasing emissions. Locus’ routing system, which considers over 200 real-world constraints such as live traffic,roadblocks, and more suggests the most efficient route, reducing delivery times and emissions.
(ii) On-demand Routing:
Brands, while trying to increase inventory to meet customer demands, often struggle with ad hoc or on-demand orders due to inefficient routing and capacity planning. Locus offers a solution that can reroute these orders. If a driver or truck doesn’t have sufficient capacity, the system reroutes the order to nearby vehicles. It also ensures existing orders aren’t delayed, enhancing efficiency and eliminates the need for restocking, thereby decreasing time on road.
C) Reverse Logistics:
Statistics suggest that 92% of customers will purchase if returns are easy. To enhance customer experience, brands must streamline returns. Traditional dispatch management systems lack the sophistication to optimize reverse logistics, often resulting in added emissions. Locus’ smart Dispatch Management Platform (DMP) can automatically assign orders based on vehicle volume and create routes that combine both forward and return logistics, making the process efficient and eco-friendly.
The Verdict
For brands, adopting advanced technology to mitigate carbon emissions is imperative as customers are becoming more eco friendly and governments are aiming for zero carbon emissions to comply with United Nations’ sustainability goals.
A zero carbon neutral strategy can’t be achieved overnight. It takes time and investment in the right areas of business and consistency in process management to see results. However, one of those investments is a smart routing technology platform like Locus, that can help you track and minimize CO2 emissions.
References:
https://www.prnewswire.com/news-releases/new-data-reveals-consumers-increasingly-choose-products-in-sustainable-packaging-globally-despite-rising-prices-301804243.html
https://www.invespcro.com/blog/ecommerce-product-return-rate-statistics/